An association formed for the purpose of promoting and developing home industries, arts and crafts in a particular region, and which does not benefit its members directly or indirectly, can be considered a public charitable institution entitled to exemption under s. 4(3)(i) of the Indian IT Act.

G.K. MITTER, J.

1. IN this reference the only question for the opinion of this Court is whether the assessee-association is a public charitable institution entitled to exemption under s. 4(3)(i) of the Indian IT Act.

2. THE assessee was incorporated as a company not for profit under s. 26 of the Indian Companies Act, 1913. As the determination of the question depends upon the construction of its constitution it is necessary to set out the relevant clauses in its memorandum of association. Clause 3.--The objects of the association are to promote and develop home industries, arts and crafts, in the Presidency of Bengal and to do all things necessary for the attainment of the object :

(1) to collect and publish or otherwise furnish information with respect to home industries, arts or crafts, in Bengal; (2) to establish or assist home industries-- (a) by the purchase of the raw materials and articles necessary for their manufacture, by advance of money or furnishing of guarantees to encourage such manufacture and the acquisition of craft secrets, rights or methods of work; (b) by promoting the formation of credit societies or other associations having for their object the extension or improvement of the work or the condition of the workers in any home industry or the sale of its products; (3) to promote exhibitions, show-rooms or other public displays of industrial work and the raising of funds from individuals, private or public bodies; (4) to purchase, sell or otherwise acquire or dispose of finished products, to act as agents for the supply of material or appliances or finished products in connection with any home industry; (5) to acquire by purchase, lease or otherwise, and hold land, buildings and property of every description deemed expedient for furthering the objects of the association, and also to build, erect and establish any buildings, factories or other structures deemed suitable for the said purposes, and to sell and dispose of such lands and property as may be deemed expedient. Clause 4.--The association shall not support with its funds or endeavour to impose on or procure the observance by its members or others of any regulations or restriction which if an object of the association would make it a trading concern. Clause 5.--The income, profit and property of the association, whensoever derived, shall be applied solely towards the promotion and carrying out of the objects of the association as set forth in its memorandum of association, and no portion thereof shall be paid-or transferred directly or indirectly by way of dividend, bonus or otherwise, howsoever by way of profit to the members of the association : Provided that nothing herein contained shall prevent the repayment of loans and deposits and other liabilities incurred in the interest of the association nor the payment in good faith of remuneration to any person in return for, or recognition of, any service to or benefit conferred on the association. Clause 6.--No member of any executive or working committee of the association shall be appointed to any salaried office of the association or any office of the association paid by fees, and no remuneration shall be given by the association to any member of such committee except repayment of out-of-pocket expenses and interest on money lent or rent for premises demised to the association. But this provision shall not apply to payments to any other company or association of which a member of the said two committees may also be a member for work done by such other company or association. Clause 7.--The fifth and sixth paragraphs of this memorandum are conditions on which the registration of the association has been obtained under the provisions of s. 26 of the Indian Companies Act (VII of 19I3). Clause 8.--Any person interested in the objects and aims of the association is eligible for membership. Clause 9.--The association shall consist of(a) ordinary members,(b) life-members, and (c) patrons. An ordina